It's like "running in place," said Lynn Reaser, chief economist at Point Loma Nazarene University. The unemployment rate, which only counts people who have looked for jobs in the last four weeks, recently fell as people dropped out of the labor force.

As the job market slowly improves, more people are likely to start looking for jobs again, Reaser said. That effect could drive the unemployment rate higher, or at least keep it from falling much more.

Looking further ahead, economists expect the U.S. economy to grow only 2.6% in 2012 overall.

That's because significant headwinds remain, including Europe in recession, volatility in the stock market and the threat of a "fiscal cliff" looming in 2013. The end of the year is set to trigger massive spending cuts, while at the same time marking the expiration of Bush tax cuts, the payroll tax cut and extended unemployment benefits.

"It's potentially a shock that could really dampen the recovery further if not derail it," said Sean Snaith, director of the University of Central Florida's Institute for Economic Competitiveness.